Many of us probably recall the days when record labels had massively staffed departments dedicated purely to artist development. Artists would go through focused training efforts in an effort to create a body of work suitable for taking to the next level (i.e., radio). Over the past 15 years or so, those label departments have all but disappeared. Today, labels do not have the time, resources, or energy to invest multiple years molding an artist and creating radio-worthy demos. Instead, labels expect artists to walk in the door with a story, a fan base, and at a minimum, a handful of radio and retail-ready recordings. The question is how do aspiring artists gain the necessary training to give them the tools they need to have the best shot at getting the attention of label executives?
Publishers Fill the Void
Given that labels have rid themselves of this burdensome task, some music publishers have begun to fill that void and engage in the art of artist development. In the past few years, publishers have seen a significant potential upside to aligning themselves with aspiring artists who also happen to be songwriters. By establishing loyalty at an early stage in a songwriter’s career, the publisher can spread its risk and create additional revenue streams that previously did not exist in exchange for committing a little extra in development funds.
When a publisher believes that a songwriter has the ability to also succeed as an artist, it’s an easy decision to commit additional funding to allow the songwriter to record some sides for the purposes of shopping to labels. Additionally, some of these publishers have built-in staff members to assist creatively and on the business side. One example, is a songwriter who, with the assistance of the publisher’s creative staff, narrowed down his recent body of work to a handful of songs and recorded them as masters. Simultaneously, with the help of a booking agent and in-house staffer who served as interim manager (on salary with the publisher and at no added cost to the songwriter), the songwriter/artist was able to play dates across the US in country clubs. This not only aided the songwriter/artist in improving his live appearance abilities, but also allowed the artist to earn a little extra money along the way while building a fan base.
In a perfect world, the publisher is able to leverage relationships to help garner the attention of label executives, which may ultimately result in a record deal. In exchange for the publisher’s development investment, the songwriter agrees to provide the publisher with a small percentage of artist-related income for a period of time (i.e., a return on investment for the publisher). For the publisher, this is an added revenue stream in addition to the publishing revenues that will be generated from the songwriter/artist having a major label release, which will hopefully include several self-written cuts.
Balancing The Cost/Reward
For the songwriter/artist, it is important to take into account the fact that he/she will be paying multiple parties from the artist-related revenues (i.e., booking agent, management, record label, business manager, and under this scenario, the publisher). Thus, as with any deal, it is crucial to consider all of the necessary payments to minimize the impact on the artist’s financial well-being. These days, it is not uncommon for an artist to pay upwards of 40-45% of revenues (some based on gross and others on “net”) once the agent, management, label and business manager are all paid. Throwing in a few additional percentage points for the publisher may seem minimal when looking at it by itself, but when adding it together with all of the other pieces, it can push the artist close to, if not beyond, the 50% mark, which is not only potentially disastrous for the artist’s financial well-being, but also is a bad psychological point to reach in paying third parties more than what the artist takes home.
The publisher artist development deals can be a great way for aspiring artists to get the tools they need without having to find an investor. But as with anything, it comes at a cost. It is imperative to look at the big picture when negotiating this type of deal while remaining positive about the potential end-result, which could have a long-lasting upside for everyone involved.
Jason Turner is a partner at Keller Turner Ruth Andrews Ghanem & Heller, PLLC, a full service entertainment and sports law firm in Nashville. He is a frequent guest speaker on emerging entertainment legal issues and an adjunct professor of Entertainment Law at Stetson University College of Law in Gulfport, FL.